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Informist, Thursday, Feb. 13, 2025

 

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--Manappuram Fin Oct-Dec consol PAT INR 2.82 bln vs INR 5.73 bln year ago
--Analysts saw Manappuram Fin Oct-Dec consol net profit INR 5.05 bln
--Manappuram Fin Oct-Dec consol revenue INR 25.60 bln vs INR 23.05 bln yr ago
--Manappuram Fin to pay INR 1 per share interim dividend 
--Manappuram Fin Apr-Dec consol PAT INR 14.07 bln vs INR 16.27 bln year ago 
--Manappuram Fin Apr-Dec consol revenue INR 76.8 bln vs INR 65.0 bln yr ago 
--Manappuram Fin OKs raising $2 bln under global medium-term note programme 
--Manappuram Fin consol AUM at INR 442.0 bln as on Dec 31, up 9.5% YoY 
--Manappuram Fin consol gold loan AUM INR 245 bln as on Dec 31, up 18% YoY 
--Manappuram Fin:Non-gold loan 44.6% of total AUM on Dec 31 vs 46.7% qtr ago 
--Manappuram Fin: Oct-Dec consol NII INR 16.34 bln, up 5% YoY 
--Manappuram Fin: Oct-Dec consol cost of funds 9.4% vs 9.2% in Jul-Sept 
--Manappuram Fin: Subsidiary Asirvad Micro Fin AUM down 17.6% QoQ Dec 31 
 

 

By Priyasmita Dutta

 

NEW DELHI – Missing Street estimates, Manappuram Finance Ltd.'s consolidated net profit for Oct-Dec plummeted nearly 51% on year to INR 2.82 billion as provisioning for bad loans rose nearly fourfold during the period. Sequentially as well, with provisions more than doubling, the gold financier's bottom line fell nearly 51%. Analysts had expected the gold financier to post a profit of INR 5.05 billion.

 

The Kerala-based company's provisioning for bad loans in the December quarter was INR 5.55 billion, against INR 1.50 billion a year ago. Analysts had unanimously flagged delinquencies and deterioration in asset quality in the microfinance segment during the quarter, especially in the quality of non-gold portfolio assets, and said this could result in higher provisioning.

 

On Thursday, shares of the company closed 1.4% higher at INR 194.00 on the National Stock Exchange. The company released its results for the December quarter after market hours.

 

A chunk of the provisioning during Oct-Dec was for the company's microfinance arm Asirvad Microfinance. This was to the tune of INR 4.73 billion, up 132.0% sequentially and 302.0% on year. Manappuram Finance's gross non-performing assets ratio during the December quarter shot up to 5.8%, 15 basis points higher sequentially and 300 bps on year. The net non-performing assets ratio, on the other hand, was 2.5% as of the end of December, 5 bps higher sequentially and 12 bps on year. 

 

Asirvad Microfinance is a key part of Manappuram Finance. It reported a loss of INR 2.53 billion for Oct-Dec, against a profit of INR 1.02 billion for the September quarter and INR 1.71 billion a year ago. The sharp detoriation in Asirvad's performance is owing to the Reserve Bank of India's regulatory action against it in October. The central bank had barred Asirvad Microfinance and three other shadow banks from giving new loans on concerns about their pricing of loans, which the central bank had found to be "excessive" and in breach of regulations.

 

On a standalone basis, Manappuram Finance's gross non-performing assets ratio worsened to 2.5% at the end of December from 2.4% at the end of September. The net bad loan ratio was 2.3%, 20 bps higher sequentially. Year on year, in Oct-Dec, both net and gross non-performing asset ratios were 50 bps worse.

 

In the quarter under review, the company's total revenue from operations rose over 11% on year to INR 25.60 billion. Sequentially, the revenue was down 2.8%. Manappuram, one of India's biggest gold loan providers, saw muted growth in assets under management owing to the slowdown in the microfinance industry in Oct-Dec.

 

The Kerala-based company's consolidated assets under management rose nearly 10% on year but fell over 3% sequentially to INR 442 billion in Oct-Dec. Of the total assets under management, gold loan assets were INR 245 billion, up only 0.6% sequentially and 18% on year. Gold loans contributed 55% to the total assets under management, followed by loans to microfinance institutions at 21%.

 

Asirvad's assets under management at the end of the December quarter were INR 100.13 billion, down nearly 18% sequentially.

 

Under revenue from operations, Manappuram Finance's net interest income in Oct-Dec was INR 16.34 billion, up 5% on year but over 5% lower sequentially. Cost of funds during the period was 9.4%, 20 bps higher that in the September quarter. The company is focused on being well capitalised with a prudent liabilities strategy while also reducing the cost of funds, it said in an investor presentation.

 

The Kerala-headquartered gold financier's consolidated profit for the first nine months of the financial year ending Mar. 31 was INR 14.07 billion, down nearly 14% on year. The revenue from operations during the same period was INR 76.81 billion, over 18% higher on year.

 

Manappuram Finance's board Thursday announced an interim dividend of INR 1 per share. Additionally, its board approved raising $2 billion under the global medium-term note programme through the issuance of foreign currency-denominated bonds by way of external commercial borrowings in one or more tranches.  End

 

US$1 = INR 86.90

Edited by Rajeev Pai

 

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